Europe stocks climb, helped by media stocks

British Sky Broadcasting shares jump, Continental, Henkel also higher

By

SarahTurner

(A previous version showed an incorrect level of profit growth for Allianz.)

LONDON (MarketWatch) -- European shares rose on Wednesday, led by media stocks, after British Sky Broadcasting reported surprisingly strong customer take-up and investors speculated about bids in the sector following News Corp.'s move for Dow Jones.

Another media gainer was Dutch publisher Wolters Kluwer (39590), up 2.8%, while Pearson (PSON) handed back some of Tuesday's gains, down 3.4%.

Pearson shares rose on Tuesday after News Corp.
NWS, +0.31%
disclosed it's made an unsolicited takeover bid for Dow Jones
DJ
the publisher of The Wall Street Journal as well as MarketWatch, the publisher of this report.

Wolters Kluwer didn't trade on Tuesday due to the May Day holiday on the Continent.

"This deal is likely to stimulate interest in the media sector after having underperformed the market by 5% over the last month, although we would caution that this is a special situation and a special buyer for strategic reasons," said analysts at Credit Suisse.

More potential deal news focused on the stock exchanges. Shares of NYSE Euronext (NYX) dropped 2.9% after it disclosed in a filing that it's entered into a $3 billion syndicated revolving credit facility. That has prompted speculation that it may gate-crash Deutsche Boerse's (581005) agreed $2.8 billion acquisition of the International Securities Exchange.

Deutsche Boerse shares dropped 3.2%.

Earnings in focus

Of other companies reporting earnings, Swiss banking group Credit Suisse
CS, -0.05%
shares dipped 0.8% after it said that it's expecting increased market volatility in the coming months, meaning that market corrections shouldn't be ruled out.

Banking group Credit Suisse said Wednesday first-quarter net income rose 5%, topping market forecasts, thanks to a strong result in equities sales and trading and debt underwriting. See full story.

Also, shares in Persil washing-powder maker Henkel (604840) rose 2.7% after it said first-quarter profit rose 14% to 210 million euros, while sales rose 6.2% to 3.2 billion euros after a strong performance from its laundry products.

Also in Frankfurt, insurer Allianz (840400)
AZ, +0.48%
said its first-quarter net income almost doubled to 3.2 billion euros ($4.4 billion) from 1.8 billion euros a year earlier, after capital gains of around 2 billion euros. The shares finished flat.

Swedish telecom company Teliasonera, (TLSN) which has recently been granted extensive rights for the Eurovision song contest, saw its shares fall 5.9% after the Swedish government said that it intends to sell an 8% stake in the company.

Brokers weigh in

In broker action, shares of Liberty International (LII) rose 1.8% after Credit Suisse upgraded the U.K. shopping center investor to outperform from underperform. Credit Suisse said that as the year progresses, dedicated real estate money will begin to move out of the more cyclical office sector and into retail.

Adidas (500340) shares declined 1.9% after UBS downgraded the sportswear maker to neutral from buy, saying that for the company to trade at multiples similar to those of peers Puma (696960) and Nike,
NKE, -0.65%
it needs to show more concrete signs of a turnaround at Reebok and hence a reduction in the risk premium.

The broker also cited the recent strong performance in the shares following speculation that a financial investor could take a stake in the company.

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